Do you know the best legal structure for your small business? Legal structure refers to the way a business is organized. Choosing the best legal structure for your business is critical, as it affects aspects of your business ranging from tax payments to your personal financial liability. The most common types of business legal structure are sole proprietorships, partnerships, and corporations.
The most common and simplest legal structure is a sole proprietorship, or a business owned by one person. The owner and the business are the same entity in terms of taxation: the business profits are personal profits and taxed as personal income. The owner is financially responsible for business and their personal assets will be used to cover losses or debts incurred by the business.
Two or more owners of the same business may file for partnership status. This type of business structure is very similar to the sole proprietorship- all partners are held financially responsible for the debts of the business and the tax burden is borne proportionally by the partners.
The most complex business structure, and the most difficult to obtain, is the corporation. In a corporation, the owners and investors are separate from the business in terms of taxation and income and are not held entirely liable for the company’s debt.
S-Corporations (Single Person Corporation) are an option for one business owner who wants to create a corporation to save money on taxes. As the sole employee of the business, they receive a salary out of the business profit and pay the appropriate income tax. The rest of the business profit they receive as a dividend payment, on which much less tax is paid. Therefore, by separating the profit into salary and dividend, the S-Corporation owner saves money on taxes.
When deciding on the best business structure for your business, consider that most businesses start small, beginning as a sole proprietorships or partnerships. These business structures require minimal paperwork and have a simple filing process, and are best suited for smaller businesses where there is less chance for high losses or being sued. Once your business takes on more risk, deals with higher amounts of debt, or requires substantially more capital, you should consider filing for corporation status to safeguard your personal assets and have access to more capital.
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Is there any sites were people do your college assignments for u? Here’s the assignment its LAW dunno wat 2 do?
1.Describe your business activities and people involved in your business. What legal structure do similar businesses have?
What are the financial and legal risks attached to your business?
Write a risk analysis of your business including worse case scenarios and who is liable financially or legally?
IN what scenario could criminal or civil actions be taken against any individuals in the company?
Work out who in worse case financial and legal scenarios is the most legally exposed person in the business.
How could you protect them through the legal structure?
2.What if any are the LICENCE REQUIREMENTS
What licence requirements are needed by your company?
Name the act and draw a diagram of the licensing process ie Name of Act, sample of licence form printed Filled out with your details and name of licence holder.
Who is the named licensee of your company?
Give reasons for the decisions of who is the licence holder.
Can a limited company be the licence holder or does it have to be an individual?
What liability in a worse case scenario be place on the licence holder?
(If no licencing requirements all 50% for question 1) Questions 1 & 2 (50%)
3.Give reasons why you would set up a limited company for your Business and give reasons why you will not set up a limited company
Give reasons why a limited company, partnership, co-op, franchise or as a sole trader is the most appropriate legal structure for your business. Chose, describe and justify one legal structure over the others.
(25%)
4.Draw a chart or diagram of the legal set up of your business.
(5%)
5.Search, price and layout in point form how you will set up a limited company or
The structure you have chosen for you business eg partnership, Limited partnership sole trader, co-op etc. (10%)
Detail how long the process might take, who you would consult and what the most and lest you could pay for the process.
Oh, that is easy. As for what to do, how about PAY ATTENTION IN CLASS!
Typically, college assignments are based on the lectures, notes, and text book. You have what is needed to complete the assignment. Don’t be a slacker.
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